DEIR AL-BALAH, Gaza — The second floor of the al-Awda factory is covered in a sticky red liquid, as if a massacre had occurred here. The truth, happily, is much less gruesome: An Israeli tank shell had ripped open plastic cartons containing strawberry juice, which had been intended to be sold during the Islamic holy month of Ramadan — before the war intervened.

Until a month ago, this factory employed 600 people in the production of roughly 125 different snacks — everything from chocolate wafers to biscuits to ice cream. Now, it is gutted: The room that contained the milk, butter, and sugar is a sickly sweet ruin of charred parcels; a hole had been punched in one of the walls to create a makeshift slide that evacuated biscuits from an encroaching fire; the potato-chip machines imported from Europe have been ripped to pieces.

Mohammad al-Talbani, the factory owner, estimates that his production facility had been worth $30 million. It had been the work of his lifetime: He launched his business after finishing secondary school in the late 1960s, making sesame and coconut sweets by hand from his home in Gaza’s Maghazi refugee camp.

Talbani believes that his factory was not merely collateral damage in the ongoing war, but that the Israeli attack was part of a broader campaign of economic warfare on the residents of the Gaza Strip. There had been no Hamas fighters anywhere near the factory when it was shelled, he insisted. "If someone had come here to launch a rocket, I’d shoot them myself," he said.

While Talbani’s claim is impossible to verify, nobody is denying the economic destruction in Gaza. The Palestinian Authority government has estimated that it could cost $6 billion to rebuild the territory: 50,000 homes have been totally or partially destroyed, roughly 250 factories have reportedly been rendered inoperable, and Gaza’s sewage treatment facility and power plant have been damaged, shrinking the available supply of drinkable water and creating a potential health crisis for residents.

In his remarks on Wednesday, Aug. 13, announcing a five-day extension of the cease-fire, Palestinian delegation chief Azzam al-Ahmed said that there had been significant progress in efforts to lift the Israeli economic blockade on Gaza — but that there are still disagreements over reconstruction issues. These debates will not only determine whether residents can rebuild after the war, but they also promise to be an important tool in Israeli efforts to weaken Hamas’s hold on the territory. As Finance Minister Yair Lapid put it, Israel would demand that "there is no rehabilitation without some sort of demilitarization [of Gaza]."

The reconstruction effort will begin with a donor conference, which will likely be held in the Egyptian resort town of Sharm el-Sheikh in September, Frode Mauring, the U.N. Development Program (UNDP) special representative for Gaza and the West Bank, told Foreign Policy. The funds will be funneled through the Palestinian Authority, which will be tasked with leading the reconstruction effort. The challenge, however, is not simply drumming up enough money — it’s reconciling the needs of reconstruction with the political demands of Gaza’s two staunchly anti-Hamas neighbors, Egypt and Israel.

The importation of building materials to rebuild Gaza’s tens of thousands of destroyed homes is one of the most potentially fraught issues. Hamas used large quantities of cement, allegedly smuggled in across the border with Egypt during the presidencies of Hosni Mubarak and Mohamed Morsi, to build its extensive tunnel network, which posed one of the most deadly threats to Israel during the current war. For that reason, Jerusalem has only allowed U.N. agencies to import cement — and it is going to be loath to ease restrictions on construction materials that could be used by the Palestinian Islamist group to rebuild its tunnel network.

However, Mauring insists that the elaborate mechanisms to ensure the proper use of cement will have to be relaxed to accomplish the massive rebuilding task in store for Gaza.

The current system requires U.N. relief agencies to bring only the cement that is needed for a given project to a work site, and then to bring back the amount that isn’t used by day’s end to a central warehouse, all the while keeping meticulous records of the cement used and currently in the warehouses. That proved viable when the UNDP only had a handful of projects in Gaza, Mauring said, but it will be impossible during the reconstruction effort.

"[These mechanisms] will be a major, major bottleneck in terms of Gaza reconstruction if it is to continue," he said. "We cannot personally be at 50,000 sites to monitor every single bag of cement — that’s not workable."

Mauring suggested a system in which the UNDP would deliver cement to families whose houses had been partially destroyed in the bombing. These families would then have an incentive to use the cement to rebuild their homes, he said, rather than handing the materials off to Hamas. Whether Israel would agree to such a policy, however, remains to be seen.

There are even more urgent problems, however, than the supply of cement. Gaza’s only power plant was hit during the war, leaving most residents with only two to four hours of electricity per day. Mauring estimated that before the war, Gaza received a total of about 300 megawatts of electricity from the plant and power lines from Egypt and Israel. Now, with the power plant offline and the electrical grid from Israel damaged, he said that Gaza is receiving about half of that.

The power plant isn’t only important for keeping the lights on. "The fact that the plant was hit means sewage pumps aren’t working, water pumps aren’t working," said Nate McCray, a spokesman for Oxfam International. "So you see sewage and brackish water seeping up into the [refugee] shelters and contaminating the water systems."

Mauring floated the possibility of bringing barge-mounted power plants to the shores of Gaza while the plant is being repaired, which could take over a year. As the Israeli Navy controls access to the Palestinian territory by sea, however, this is yet another topic that will be subject to drawn-out negotiations.

But back in Mohammad al-Talbani’s al-Awda factory, turning the lights back on is the least of his worries. Munching on a chocolate wafer that had been rescued from the shelling, Talbani has little patience for questions about how he will rebuild. It all depends, he said, on the politics — if Israel lifts the blockade on Gaza. This factory, he said, took him 40 years to build, and it will take him four to five years to reconstruct, even if he has the necessary money and raw materials. Whatever happens, he seems determined to try.

"I began from under zero, and now I have 5 percent [of what I had before the war]," he said. "So I will work to rebuild it — this is my life."